Audiophonics Limited manufactures and sells high-quality and durable ear buds for use with personal electronics that are custom moulded to each customers ear. Cost data for the product follow:

Variable costs per unit:
Direct materials	$	12
Direct labour		17
Variable factory overhead		7
Variable selling and administrative		6
Total variable costs per unit	$	42
Fixed costs per month:
Fixed manufacturing overhead	$	235,400
Fixed selling and administrative		214,000
Total fixed cost per month	$	449,400

The product sells for $65 per unit. Production and sales data for May and June, the first two months of operations, are as follows:

	Units Produced	Units Sold
May	21,400	16,200
June	21,400	26,600

Income statements prepared by the Accounting Department using absorption costing are presented below:

	May			June
Sales	$	1,053,000		$	1,729,000
Cost of goods sold:
Beginning inventory		0			244,400
Add cost of goods manufactured		1,005,800			1,005,800
Goods available for sale		1,005,800			1,250,200
Less ending inventory		244,400			0
Cost of goods sold		761,400			1,250,200
Gross margin		291,600			478,800
Selling and administrative expenses		311,200			373,600
Operating income	$	(19,600)	)	$	105,200

Required:

1. Determine the unit product cost under each of the following methods.

2. Prepare variable costing income statements for May and June using the contribution approach. (Do not leave any empty spaces; input a 0 wherever it is required.)

3. Reconcile the variable costing and absorption costing operating income figures. (Loss amounts should be indicated with a minus sign.)

4. Not available in Connect.